nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2022‒11‒21
nine papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Aversion to Hiring Algorithms: Transparency, Gender Profiling, and Self-Confidence By Marie-Pierre Dargnies; Rustamdjan Hakimov; Dorothea Kübler
  2. Performance Pay in Insurance Markets: Evidence from Medicare By Michele Fioretti; Hongming Wang
  3. Trading away incentives By Colonnello, Stefano; Curatola, Giuliano Antonio; Xia, Shuo
  4. The role of within-occupation task changes in wage development By Bachmann, Ronald; Demir, Gökay; Green, Colin; Uhlendorff, Arne
  5. Gender gap in politician performance and its determinants By Garcia-Hernandez, Ana; Grossman, Guy; Michelitch, Kristin
  6. Financial Incentives and Performance: A Meta-Analysis of Economics Evidence By Petr Cala; Tomas Havranek; Zuzana Irsova; Jindrich Matousek; Jiri Novak
  7. Improving Workers’ Performance in Small Firms : A Randomized Experiment on Goal Setting in Ghana By Cettolin, Elena; Cole, Kym; Dalton, Patricio
  8. Workplace Presenteeism, Job Substitutability and Gender Inequality By Ghazala Azmat; Lena Hensvik; Olof Rosenqvist
  9. Do Innovative Firms Pay Higher Wages ? Micro-Level Evidence from Brazil By Cirera,Xavier; Soares Martins Neto,Antonio

  1. By: Marie-Pierre Dargnies; Rustamdjan Hakimov; Dorothea Kübler
    Abstract: We run an online experiment to study the origins of algorithm aversion. Participants are either in the role of workers or of managers. Workers perform three real-effort tasks: task 1, task 2, and the job task which is a combination of tasks 1 and 2. They choose whether the hiring decision between themselves and another worker is made either by a participant in the role of a manager or by an algorithm. In a second set of experiments, managers choose whether they want to delegate their hiring decisions to the algorithm. In the baseline treatments, we observe that workers choose the manager more often than the algorithm, and managers also prefer to make the hiring decisions themselves rather than delegate them to the algorithm. When the algorithm does not use workers’ gender to predict their job task performance and workers know this, they choose the algorithm more often. Providing details on how the algorithm works does not increase the preference for the algorithm, neither for workers nor for managers. Providing feedback to managers about their performance in hiring the best workers increases their preference for the algorithm, as managers are, on average, overconfident.
    Keywords: algorithm aversion, experiment, hiring discrimination, transparency
    Date: 2022
  2. By: Michele Fioretti (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Hongming Wang
    Abstract: Public procurement bodies increasingly resort to pay-for-performance contracts to promote efficient spending. We show that firm responses to pay-for-performance can widen the inequality in accessing social services. Focusing on the quality bonus payment initiative in Medicare Advantage, we find that higher quality-rated insurers responded to bonus payments by selecting healthier enrollees with premium differences across counties. Selection is profitable because the quality rating fails to adjust for differences in enrollee health. Selection inflated the bonus payments and shifted the supply of highrated insurance to the healthiest counties, reducing access to lower-priced, higher-rated insurance in the riskiest counties.
    Keywords: pay-for-performance,Medicare Advantage,risk selection,quality ratings,health insurance access
    Date: 2021–10–15
  3. By: Colonnello, Stefano; Curatola, Giuliano Antonio; Xia, Shuo
    Abstract: Equity pay has been the primary component of managerial compensation packages at US public firms since the early 1990s. Using a comprehensive sample of top executives from 1992-2020, we estimate to what extent they trade firm equity held in their portfolios to neutralize increments in ownership due to annual equity pay. Executives accommodate ownership increases linked to options awards. Conversely, increases in stock holdings linked to option exercises and restricted stock grants are largely neutralized through comparable sales of unrestricted shares. Variation in stock trading responses across executives hardly appears to respond to diversification motives. From a theoretical standpoint, these results challenge (i) the common, generally implicit assumption that managers cannot undo their incentive packages, (ii) the standard modeling practice of treating different equity pay items homogeneously, and (iii) the often taken for granted crucial role of diversification motives in managers' portfolio choices.
    Keywords: dynamic contracting,equity incentives,executive compensation,hedging,insider trading
    JEL: G32 G34 J33 M12 M52
    Date: 2022
  4. By: Bachmann, Ronald; Demir, Gökay; Green, Colin; Uhlendorff, Arne
    Abstract: We examine how changes in task content over time condition occupational wage development. Using survey data from Germany, we document substantial heterogeneity in within-occupational changes in task content. Combining this evidence with administrative data on individual employment outcomes over a 25-year period, we find important heterogeneity in wage penalties amongst initially routine intensive jobs. While occupations that remain (relatively) routine intensive generate substantial wage penalties, occupations with a decreasing routine intensity experience stable or even increasing wages. These findings cannot be explained by composition or cohort effects.
    Keywords: Technological progress,polarization,tasks,routine workers,training
    JEL: J31 J24 E24
    Date: 2022
  5. By: Garcia-Hernandez, Ana; Grossman, Guy; Michelitch, Kristin
    Abstract: Women politicians face barriers that can undermine their performance relative to men. Using original micro-data from Uganda, we test for gender gaps in performance across different job duties in subnational legislatures. We hypothesize, and find, that performance gender gaps are greatest in job duties that require greater peer interaction (legislative duties), while no such gaps exist in more individually-performed duties (e.g., meeting with the electorate, facilitating constituency development). Fine-grained network data reveals women's informal exclusion in politician networks, and this exclusion holds explanatory power in explaining job duties requiring interaction with fellow politicians. Further, qualifications and previous experience also determine part of the gender performance gap in more intricate tasks. Moving forward, advocacy organizations may consider holding trainings and simulations with politicians on performing job duties in ways that encourage cross-gender professional network ties.
    Keywords: Politician performance,informal exclusion,networks,gender gap
    JEL: O10 H79 H83 H11
    Date: 2022
  6. By: Petr Cala (Charles University, Prague, Czech Republic); Tomas Havranek (Charles University, Prague, Czech Republic & Centre for Economic Policy Research, London); Zuzana Irsova (Charles University, Prague, Czech Republic & Anglo-American University, Prague); Jindrich Matousek (Charles University, Prague, Czech Republic); Jiri Novak (Charles University, Prague, Czech Republic)
    Abstract: Standard economics models require that financial incentives improve performance, while leading theories in psychology allow for the opposite. Experimental results are mixed, and so far have not been corrected for publication bias and model uncertainty. We collect 1,568 economics estimates together with 46 factors capturing the context in which the estimates were obtained. We use novel nonlinear techniques to correct for publication bias and em- ploy Bayesian model averaging to account for model uncertainty. The corrected estimates are zero or tiny across contexts of field experiments, including differences in performance measurement, task definition, reward size and framing, motivation beyond money, subject pool, and estimation technique. Laboratory experiments produce statistically significant estimates on average after correction for publication bias, but even there the effect is weak. Experimental economics evidence is inconsistent with standard economics models.
    Keywords: incentives, experiments, meta-analysis, model uncertainty, publi- cation bias
    JEL: C90 D91 M52
    Date: 2022–11
  7. By: Cettolin, Elena (Tilburg University, Center For Economic Research); Cole, Kym; Dalton, Patricio (Tilburg University, Center For Economic Research)
    Keywords: Behavioral Constraints; Goals setting; Management Practices; Small firms; Informal Businesses
    Date: 2022
  8. By: Ghazala Azmat (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEP - LSE - Centre for Economic Performance - LSE - London School of Economics and Political Science); Lena Hensvik (Uppsala University); Olof Rosenqvist (IFAU - The Institute for Evaluation of Labour Market and Education Policy)
    Abstract: Following the arrival of the first child, women's absence rates soar and become less predictable. This fall in workplace presenteeism harms women's wages, especially in jobs with low substitutability. Although both presenteeism and job uniqueness are rewarded, we document that women's likelihood of holding jobs with low substitutability decreases relative to men's after childbearing. This gap persists, with important long-run wage implications. We highlight that the parenthood wage penalty for women could be reduced by organizing work so that more employees have tasks that can be performed satisfactorily by other employees in the workplace.
    Keywords: Work absence,Job substitutability,Gender wage inequality
    Date: 2021–11
  9. By: Cirera,Xavier; Soares Martins Neto,Antonio
    Abstract: Several studies have documented a positive and causal relationship product or process innovation -- and labor productivity. Given the links between labor productivity and wages, a likely implication of this positive relationship is that innovation is associated with higher wages of more productive firms. This paper explores the relationship between innovation and wages using Brazil's employer-employee census and a novel measure of innovation derived from the share of technical and scientific occupations of workers in the firm. The results show a robust and positive wage premium associated with innovative firms. The decomposition of this innovation-related wage premium suggests a series of important stylized facts: (i) the innovation wage premium is larger for manufacturing but also positive and significant for agriculture and services; (ii) it is larger for large firms, but also positive and significant for all firm size categories including micro firms; and (iii) it is larger for medium- and low-skill occupations, although this depends on the use of firm fixed effects. More importantly, the paper explores the causality between innovation and wages and finds empirical support for the ideas that “self-selection†—firms that innovate already pay higher wages before becoming innovators -- and increases in wages associated with starting innovation activity, which are persistent for three years after firms start innovating.
    Keywords: Labor Markets,Food&Beverage Industry,Plastics&Rubber Industry,Business Cycles and Stabilization Policies,Textiles, Apparel&Leather Industry,Pulp&Paper Industry,Common Carriers Industry,Construction Industry,General Manufacturing,Skills Development and Labor Force Training,Food Security
    Date: 2020–10–19

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